Why Arizona Consumers Should Often Avoid the Instant Credit Option When Faced with a Financial Emergency

Here are the reasons why Arizona consumers should often avoid the instant credit option when faced with a financial emergency.

Often, certain types of businesses in Arizona offer instant credit – or “on-the-spot” credit options. Normally, these businesses provide potentially expensive services. For example, when Arizona consumers visit auto garages, hospitals, or veterinary clinics, they may face heavy charges when they leave. Then, if they don’t have the immediate means to cover the cost of these bills, instant credit options seem easy and appealing. However, the convenience of instant credit normally comes with a high price tag. So, instead of immediately signing up for on-the-spot financing, consumers in Arizona should explore their credit options, and choose the one that makes the most sense.

Questions that Arizona Consumers Should Ask Before Signing Up for Instant Credit

When faced with expensive car repair or medical bills, sometimes instant credit options make sense for Arizona consumers. Yet, before signing on to a financing deal, right on the spot, consumers should ask the following questions.

Is a third-party lender involved?

It’s important for consumers in Arizona who finance bills to know who they’re actually dealing with. Often, companies that offer instant credit do so through third-party lenders that have their own terms and conditions attached to loans or lines of credit. Unfortunately, representatives from a business may not know all of these terms and conditions. This is why consumers should research lenders themselves. So, call the company and ask for lending details, and look online for customer reviews.

Are you signing up for a credit card or an installment loan?

This is a necessary question for consumers in Arizona who are concerned about their credit scores. These two types of credit are evaluated differently on credit reports, and each type affects credit scores in different ways. For example, an installment loan doesn’t have much impact on credit utilization ratios. However, credit card balances are directly linked to utilization ratios, which make up about 30% of consumer credit scores in Arizona. If an instant credit option involves a credit card, and this credit card gets maxed out almost immediately, your credit score will likely drop.

What is the interest rate?

Most of the time, instant credit financing options come with higher-than-average interest rates. So, most Arizona consumers who finance their bills end up paying a lot more than the original balances. Granted, some businesses offer 0% financing for a certain amount of time. Yet, any loan or credit card that comes with 0% interest may include a deferred interest clause in the contract. This means that, unless a consumer pays off the loan or credit card balance within a certain amount of time, they pay interest charges on the entire amount borrowed.

What are your alternatives?

Consumers in Arizona faced with sudden, large bills can charge them to existing credit cards. Yet, they must understand that doing this could inflate their credit utilization ratios and cause credit score damage. Other, potentially cheaper, options include personal loans with competitive interest rates and home equity lines of credit (HELOCs).

Do you have to make a decision right now?

Knowing that you might have options beyond instant credit, don’t get pressured into making the wrong financing decision. Instead, ask your service provider if you can take a few days to review your options and get back to them. Normally, Arizona businesses care about customer satisfaction, so they should work with you as long as you remain transparent about your plans to pay your bill.

Why All Consumers Who Use Credit in Arizona Should Regularly Check their Credit Reports

Whether you use loans, credit cards, or any type of credit, you should check your credit reports at least once every 12 months. Unfortunately, creditors and the credit bureaus often make mistakes when handling consumer information. Then, these mistakes turn into credit report errors that frequently damage consumer credit scores.

Fortunately, the Fair Credit Reporting Act (FCRA) entitles Arizona consumers to accurate credit reports, so you have the right to demand the removal of credit score damaging errors. Yet, you must first identify and report them. So, take advantage of the Fair and Accurate Credit Transactions Act (FACTA). According to this statute, you may request free annual copies of your credit reports from the three major credit bureaus. Just go to www.annualcreditreport.com to get the most recent versions of your credit reports from TransUnion, Equifax, and Experian.

Then, if you find that mistakes and errors on one or more of your credit reports have brought your credit score down, contact Credit Repair Lawyers of America in Arizona. Sadly, even though it is their right to do so, the credit bureaus don’t make it easy for consumers to dispute inaccuracies on credit reports. This is why you shouldn’t tackle the dispute process on your own. Just call the credit pros at our firm, and an experienced credit attorney will get you clean credit reports for FREE.

How to Get Better Credit Legally and for Free in Arizona

Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (480) 771-6001 or contact us on our contact page.

For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/arizona/credit-repair/.